Or, Why LinkedIn gets paid even when jobs don’t get filled

If you’re going to recruit and hire people for your business, or if you’re going to look for a job, you need to understand why America’s institutionalized employment system doesn’t work. It’s important to know the short history of reductionist recruiting — layers of matchmaking technology designed for speed, distribution, and for handling loads of applicants.

It has nothing to do with enabling employers to meet and hire the most suitable workers.

Want Ads

When somebody invented the newspaper want ad, it was an innocent enough way to find people to do jobs. An employer said what it was looking for, people wrote a letter explaining why they were interested, threw in their resume, and mailed it in.

Because a want ad cost quite a bit of money (thousands of dollars in The New York Times), ads were almost always legit. Applicants had to pay for a stamp, and motivation was high to apply only to the most relevant. What’s not to like? Even when professional resume writers stepped in, and started touting salmon-colored paper to make their clients’ submissions literally stand out, it was still manageable; employers knew immediately which applications to throw out! Meanwhile, the newspapers made out like bandits advertising jobs.

Internet Job Boards

When the Internet came along, somebody thought to put all the ads online — to get better distribution, and more responses from more applicants. The jobs sites quickly realized this made wants ads cheaper, and to make money, they had to sell more ads.

Wink, wink — questionable ads, like multi-level-marketing schemes, were welcome! So were ads for expired jobs, kept there by employers who liked a steady stream of resumes even when they didn’t need them.

The Keyword Age

Employers no longer needed to read resumes or applications. Software compared words in job descriptions to words in resumes, and HR could accept or reject applicants without even knowing who they were!

Clever applicants started larding their resumes with keywords — making HR’s job all the harder, and job interviews a waste of time. It was so easy for people to fake their way past the system that HR panicked and drew the blinds. Everyone was rejected.

This experience led employers to agree that, yes, America is in a terrible talent shortage — during the biggest talent gluts in history. Even the U.S. Secretary of Labor, Thomas Perez, banged the gong:

“I speak to a lot of business leaders who are trying to hire. They want to hire and the most frequent thing I hear from them is all too many people coming through the door don’t have the skills necessary to do the job I need to do.”

“Too many people”?? Say what?

Reductionist Recruiting: Get paid for $@*#&!

Perez isn’t holding those employers accountable. They use applicant tracking systems (ATSes) to solicit thousands of job applicants to fill just one job — then they complain they’ve got too many of the wrong applicants. The employers themselves are responsible for the problem. (News Flash: HR causes talent shortage!)

Welcome to reductionist recruiting: Jobs don’t matter. People and skills don’t matter. The coin of the realm is what computer scientists call character strings: strings of characters, or letters and numbers, standing in for jobs and people. That’s what’s sold by job boards and bought by employers.

The product is keywords. The system has nothing to do with filling jobs, or that’s how LinkedIn, Monster.com, Taleo and JobScan would get paid.

They get paid to keep the pipeline full of character strings. Employers and job seekers get scammed every day they play the game. And HR is the culprit, because that’s who signs the purchase orders and the checks to use these systems.

The New Age Of More Reductionist Recruiting

The high-tech-ness of all this (Algorithms! Artificial Intelligence! Intelligent Job Agents!) sent venture investors scurrying to put their money into reductionist recruiting, because HR departments didn’t care whether they hired anyone. Their primary business became the “pipeline” of job postings and processing incoming keywords.

That’s why Reid Hoffman and Jeff Weiner are getting rich while you can’t get a job.

It’s all stupid now. The head of Monster.com promotes “semantic processing” algorithms that match keywords better than any other job board. LinkedIn (LinkedIn: Just another job board) claims that special keywords — called “endorsements” — add powerful credibility to all the other keywords on people’s online profiles. And “job board aggregators” like Indeed.com collect all the keywords from every job board, grind them up and sort them, and deliver more and better keywords than any other technology.

We know this is all a big load of crap when the next iteration of recruitment start-ups are designed to further distance employers and job seekers from one another.

Reductionist Recruiting 3.0

That’s the point behind a new start-up called JobScan. This new service gives job seekers the same power employers have. For a fee, JobScan “helps you write better resumes.” Cool — we need better ways to help employers make the right hires!

But it turns out JobScan doesn’t do that. It doesn’t help match workers to jobs any more than ATSes do. All it does is help job applicants scam ATSes by using more words that will match the words in employers’ job descriptions. More reductionist recruiting.

James Hu, co-founder and CEO of JobScan, told TechCrunch that, in the past, a real person would review your resume to judge whether you were worth interviewing. “But now you are just a record in the system.”

Duh? And Hu’s service treats you as nothing more. JobScan’s home page shows two text boxes. In one, you post your resume. In the other, you paste the description of the job you want to apply for. You click a button, and it tells you “how well your resume matches the job description.” Now you can add more of the correct keywords to your resume.

In just a couple of entrepreneurial generations, we’ve gone from stupid ATSes that rely on word matches to deliver “too many people…[that] don’t have the skills necessary to do the job,” to a whole new business that enables job seekers to manage the words they dump into those useless ATSes.

(Note to venture investors who missed out on the first rounds of Monster.com, Indeed.com and LinkedIn: This is a new opportunity!)

JobScan’s algorithms tell you which additional keywords you need to add to your application to outsmart the employer’s keyword algorithm.

It’s like your people talking to my people, so you and I don’t have to talk to one another. We can sit by a pool sipping Caipirinhas (my new favorite drink from Brazil), and wait for our respective people to do a deal that will make us all money.

A Short History of Failure: More venture funding wanted!

Entrepreneurial ATS makers game the employment system to make loads of money while employers reject more and more job applicants. Now there’s another layer on this scam — and it was inevitable. Entrepreneurs are getting funded to create ways to help you beat the databases to fool employers into interviewing you, whether you can do the job or not. (I wish thoughtful entrepreneurs like Hu would put their talents to work creating value, not outwitting admittedly silly job application systems.)

Job seekers are taught every day that it doesn’t really matter whether you can do a job profitably. What matters is whether you can game the system to get an interview, just so you can get rejected because, in the end, employers don’t hire words that match jobs. They want people who can do jobs. They just don’t know how to find them. (See Getting in the door for alternative paths to the job you want.)

Of course, any dope can see the real problem: HR isn’t willing to hire key words, even though it pays an awful lot of money for them. And it certainly has no idea where the talent is.

I can’t wait for employers to wake up and smell the coffee: Start paying LinkedIn, Monster, and Indeed only when those suckers actually fill a job.

Am I nuts, or has America’s employment system gone completely to hell with plenty of venture funding behind it?

Pao’s purported aim is to help women avoid discrimination. According to studies she cites, male and female managers reject women who negotiate assertively. But changing the rules the way she has at Reddit will likely result in lower compensation packages for men and women — something CEOs get patted on the back for by shareholders.

I don’t think much of anyone who doesn’t negotiate assertively, male or female. Curtailing negotiating hurts everyone and avoids the real problem. Here’s an analogy: Certain people are not allowed to sit at the lunch counter. So the lunch counter is removed to eliminate discrimination.

Is that a solution? Of course not. Neither is Pao’s policy.

If the studies Pao bases her action on are correct, the way to create salary parity is to change the way men and women respond to women who negotiate. Pao’s solution cheapens women who dare to negotiate — but in the end, it’s those women who will change the system. Shutting them down accomplishes nothing in the long term but to save money for employers.

Is Pao’s policy really going to make getting a job more fair for women? Or does it make dumbos of us all — men, women, job seekers and hiring managers alike?

A long-time reader sent me a brief exchange he had with the Human Resources manager at a company that interviewed him — and the diss he received in reply is so transparent, so foolhardy, and so naïve that it’s worth a discussion.

It really is a nightmare world out there, folks. Lots of HR people are clueless about what constitutes a royal F-you to a job applicant. Is this what they’re teaching in HR school?

A reader’s note to HR after an interview

Dear [HR Manager]:

It’s been four months since I first came in to interview and, based on the “radio silence,” I am assuming that I am not being considered for hire. Could you please confirm that the position has been filled, or that it has been put on hold? Thank you.

The HR manager’s reply

Hi [applicant],

Well, as I told you, an old employee appeared on the scene and he became our first choice, based simply upon the fact that he had quite a tenure here and could have hit the ground running. We waited for schedules to coincide and then some travel came up on both ends and then he eventually decided to stay with his current company.

We have yet to fill the position and I’ve not been told that you are out of the running but I think it would be safe to say they hoping for more of a perfect fit, personality-wise. (That is based on the personalities that are already ensconced here…) I will keep in touch with you.

Warm regards,

[HR Manager]

Where do I begin?

The job applicant shared a draft of the response he planned to send, but I know there are a few very young subscribers to this newsletter, so I can’t print it. I advised him not to send it, and he expressed this concern:

“There’s a local recruiter I know, who said that people get blackballed in the local HR groups.”

Yes, HR folks have pretty good back channels for sharing such stuff and for exacting punishment. But let’s get back to what the HR manager wrote. It’s one of the best F-you e-mails I’ve ever seen from HR to a job applicant, mainly because it’s so innocent and reveals a staggering naivete and nonchalance about the HR manager’s role in representing the employer.

Where do I begin? I’m going to make just three comments about it, and I want to throw this out to the Ask The Headhunter community.

First, this is a company manager writing the note. It’s not some greenhorn personnel clerk — but a person with authority to make decisions and to represent the employer. This company is dead meat in the public relations crucible — and the HR manager belongs in the Thunderdome.

Second, rejecting a candidate is one thing, but the entire note is all about the company’s hiring problems. There’s not one word about the job applicant’s qualifications. Why is the HR manager disclosing details about the company’s travails in trying to re-hire an old employee who’s not interested?

Third, I understand that employers don’t like to give applicants reasons for rejection — to avoid litigation — so, why does this HR manager tell the applicant that his personality is the problem? But the capper is the psychopathy: The HR manager closes with warm regards.

I don’t think this HR manager’s intent was to diss the applicant, because it’s plain that the manager is naïve. That makes this the company’s fault because it chose this manager as the interface to its professional community. And that’s why this is one of the worst disses I’ve ever seen.

Make no mistake: Job hunters are often guilty of faux pas as bad as this. But when an HR manager does it, an entire company suffers because job applicants spread the story throughout their professional community. And that’s how companies like this one are taught a terrible lesson. (For more about how employers hurt themselves, see Death By Lethal Reputation.)

Okay, it’s time to share your thoughts:

What do you think is wrong with this e-mail from HR to the job applicant? (There’s so much more than the three issues I pointed out!)

Can you top this reader’s story? What’s the biggest diss you’ve been dealt by HR when applying for a job? And, to balance this out, what’s the best behavior you’ve seen from an HR manager?

Question

I applied for a Senior Director position with a large healthcare software company. I was “selected” by HR to begin the recruitment process, which starts with “assessment tests” such as aptitude and personality tests. The largely canned e-mail they sent me states that I should block off two hours to complete these examinations, and I was provided with a link and logon information to the assessment website. Mind you, I still have not talked with the hiring manager.

I don’t really have two hours to perform these silly tasks, though the job itself does sound challenging from the description provided. Is there anything I can do to bypass this process, or should I just run and hide from this firm? How can I be sure the third party contracted to perform the assessment isn’t selling or trading my information with other employers without my knowledge? Thanks very much, I am a big fan of your blog.

Nick’s Reply

Glad you enjoy the blog — thanks for your kind words.

My approach to situations like this is not to say no. It’s to set terms you are comfortable with, and then let the employer say yes or no. If your terms are prudent and reasonable, and they say no, then you know something funky is up — and that you’ve really lost nothing in the bargain. You merely avoided wasting your time.

But I don’t think it bodes well when a company wants you to do tricks to get an interview, so you’re justified to be concerned. What I’m about to suggest will likely result in your being rejected from further consideration by this company.

I’d tell HR you’d be happy to comply with their request, but your busy schedule precludes you from filling out forms and going through administrative processing (tests) until you and the manager “establish good reasons to pursue the possibility of working together.” In other words…

No testing prior to meeting the hiring manager. Why invest your valuable time if they won’t invest theirs?

No testing with third-party firms unless they provide in writing (a) a disclosure that defines who will have access to your results, (b) a confidentiality statement (signed by the testing firm and the employer) stating that they will not disclose your results to anyone without your express written permission, (c) credentials of the test administrators and those who will score and interpret the results, and (d) written assurance that they will provide you with results and interpretation of your tests.

Now let’s get down to business. You’re interested in the job you read about, so pursue it on your own terms.

I’d contact the office of the person you’d be reporting to if hired. (See Should I accept HR’s rejection letter? for some tips.) I’d politely explain that you’re glad the company wants to interview you, and that you’d be happy to come in to meet and talk. If you mutually decide to continue discussions about a job, you’d be happy to take tests and suffer through the HR gauntlet.

How to Say It“I get a lot of requests to do such tests but I judge how serious an employer is about me as a candidate by whether they will invest the time to meet me first. I always go the extra mile for a company that demonstrates that level of interest. In fact, if you have time to meet, I’ll be glad to prepare a plan for how I’d do the job — and we can discuss it.”

I’m sure you get the idea. The point is to say this to the hiring manager — not to HR. If you need help with that last part, see Fearless Job Hunting, Book 6: The Interview: Be The Profitable Hire, particularly the sections, “How can I demonstrate my value?” and “Are you an A or B candidate?”, pp. 8-11. I think that offering to arrive with a business plan in hand will reveal whether the manager is on the ball. How could any good manager not be intrigued?

As you’ve already surmised, the odds are extremely high that the HR department really doesn’t know whether you are a viable candidate. They’d rather spend money on tests to filter you in or out, than spend the hiring manager’s time to interview you to make a judgment. So, I don’t think you have much to lose. At this juncture, you’re probably not a serious contender. If you were, they’d handle you with kid gloves and they’d be seducing you rather than harassing you.

Of course, the tests might be useful, interesting and valid tools to judge your skills. After you talk with the manager.

Your last concern is valid. Those third-party testing companies invariably own your results. The papers you sign usually give them the right to share your results with anyone they want to, including some other company that obtains your resume — and looks up your test results because it’s already the testing firm’s client. You could get rejected without ever knowing why.

Be careful. Use your judgment. Be polite, be professional, but don’t be a sucker. Expect the kind of professional treatment and consideration that you give others.

Have employment tests taken the place of screening interviews? Is this just another way to save HR time? More important — does this extreme testing practice waste your time or help you get interviews?

Question

I have not been on the job market since 2007, and after a layoff early October 2014 I am fighting my way through this job market. I have the background, experience, and personality a high tech company was looking for when they advertised a senior technical position at $96,000. After all the interviews, we seemed to be doing great, until my final face to face interview, where I was informed there are now two positions — one senior and one junior. During my initial screening with the company recruiter I was clear on my salary requirements.

When I received the company’s offer letter, it was for $75,000, way below what we had discussed. I was insulted, shocked, and angry. When I called the recruiter, she stated there were a lot of strong candidates, that there were actually five positions, and that I fit better into a junior role at the salary offered. I replied that I applied for only the senior position at $96,000 and that there was no discussion of four other positions. I asked about the differences between the positions, and it’s clear from what the hiring manager says that there are none but the salary!

I want to send a response letter stating that I was a candidate for only the senior job, re-emphasizing my experience and expertise, and referencing the original senior salary range. What would you recommend?

Nick’s Reply

If you stand a few feet back from this and look at it for what it is, I think you’ll see the proper answer. I’m going to show you how to improve this job offer dramatically, but you must be ready to play this game for keeps.

First let’s do a reality check. This employer is playing you. You laid down the terms for the interview when you (a) applied for a senior technical position, and (b) when you stated your salary requirements and they agreed to proceed with those two understandings.

Now look at the facts:

They offered you different job

At a much lower salary.

We could just call this a stupid HR trick, but there’s another name for it: Bait and switch. A car dealer baits you with a test drive in a car you want to buy after you saw the price. You show up with a check, and they offer you a different car at a different price. You’d kick them down the street for switching the deal and wasting your time.

You did what you were supposed to do, so you’re thrown for a bit of a loop. You interviewed for a certain job at a certain salary level. They knew your expectations, and they agreed to proceed with the interviews. Then they changed all the terms and made a ridiculous offer. Had they made no offer, I’d just say the match didn’t work out. But this employer is clearly manipulating applicants. (I find this is most common with staffing firms that hire people and assign them to work for their clients. See Bait & Switch: Games staffing firms play.)

You’re trying to behave rationally, and you’re looking for a reasonable explanation and next step. The recruiter and manager should be trying to impress you — see Baiting the talent — but they are doing the opposite. They are breaking basic business rules and pretending the problem is yours.

But two can play at this, and you can play without doing anything unprofessional. First, you must decide that you are willing to walk away from the junior position at the junior salary. (If you’re desperate for a paycheck, then you know what you must do.)

What I’d do is sign the offer letter and send it back to them. But I’d cross out the salary and enter the salary you told them you wanted. Initial it. Cross out the junior title and write in the senior title you interviewed for. Initial it. Accept the position at the salary level you all discussed. Add a note that says:

“This is the job I applied for and that you interviewed me for, at the salary range we discussed. If you are prepared to sign off on the original terms as we discussed them, I am ready to start work in two weeks.”

Then let them figure it out.

My prediction is that you’ll never hear from them again. However, there’s a chance that, having a solid acceptance in hand, along with a start date, from a candidate they have judged worthy of hiring, they might negotiate a reasonable salary for the job you want. You’ve written your own ticket, and it’s up to them to join you for the ride. If they decline, you’ve lost nothing (having already decided you wouldn’t accept less) and you’ve preserved your integrity and self-respect.

If they decline, write them off and move on. These are jerks of the first order and I’d never talk to them again. This is an unscrupulous recruiter who advertises a high-level, desirable job at a high salary to entice seasoned, experienced technical people like you to invest plenty of time in interviews — just so they can short-sell you on a lower-paying job that they’d prefer to fill with much more highly qualified candidates at a huge discount.

They are con-men. You told me off-line who this company is: one of the biggest, most respected computer companies in the world — but it doesn’t matter. They’re still con-men.

Many, many people in today’s job market would fall for this and rationalize that it’s the best they can do. Maybe so — but when you add in a confidence game, we’re left with a bunch of self-deprecating job seekers who let themselves be suckered. Con-men love that.

I’d be interested to know what you do and what happens. The problem, of course, is that there are desperate job hunters who will accept any job under any terms and at any pay. This employer counts on that. It’s what’s wrong with our economy today: Crooks and suckers. They create a market that can’t last. It can only go south. For more about this, see Employment In America: WTF is going on?

(I mean no disrespect to job seekers who need to put food on the table and who will take any job to do so. I’d do it myself. But the economic reality is that being put in this position creates a vicious downward cycle that encourages more of the same from ruthless employers.)

There is nothing wrong with you or your expectations. If you can afford to walk away from this, I would not look back. Jerks make lousy employers. You need only one employer with integrity.

Did you ever feel pressured to accept a lousy offer for a job you never applied for? What’s the most bizarre job offer situation you’ve been in — and what did you do? Was I too tough on this reader? What would you advise?

Question

The more I read your columns, the more I realize that the employment process is not just broken. It’s inappropriate and run by people who think they can demand anything from people who need a job. Like private, personal information you’d never just hand over to anyone.

I viewed an employment application yesterday and I didn’t have issues with most of what they asked for, until I got to the request for my SSN. What do they need that for? My thinking is that providing your SSN would only be appropriate if and when you are hired. In your opinion, when would it be acceptable to provide your social security number (SSN) to a potential employer?

Nick’s Reply

Employers, like your phone company and gas company, use your SSN to identify you in their databases because it’s a unique number. It’s the lazy vendor’s way to track customers, and the lazy HR department’s way to track job applicants. And it’s frankly irresponsible.

“Never put a Social Security Number on your resume. You can provide it when you are invited for an interview or when the employer obtains your permission to conduct a background check. Widespread access to your SSN puts you at risk for identity theft.”

I know many HR workers will shake their heads and say I’m being overly cautious, and that they really do need a job applicant’s SSN. So here’s my challenge: Give me one good reason why an applicant’s SSN is necessary to proceed with a job interview.

If it needs a unique identifier, why doesn’t the employer just ask for your credit card number? For that matter, why don’t you — the applicant — ask the HR representative for his SSN, as well, so you can do a background check on him? (Two can play this game, if one thinks he can justify it.)

Yes, these are rhetorical questions — but they’re no nuttier than improper requests for your SSN.

I don’t believe any employer really needs your SSN until you are hired, when it’s necessary to process and report your contributions to your social security account. If the employer needs it to conduct a background check, wouldn’t you want the employer to put some skin in the game first — for example, by actually interviewing you and indicating it’s interested in hiring you? I’d take that a step further and ask the employer to (1) disclose exactly what kind of check it’s going to do, and (2) agree to show you everything it finds. (Even credit bureaus are required to show you what they find. Which reminds me: You should be just as wary of requests by employers for your credit report: Presumptuous Employers: Is this HR, or Proctology?)

If you think my suggestions are a bit over the top, then try responding to the employer with these two businesslike questions: For what reason do you need my SSN? Or, What are you going to do with it?

The reality is, some software designer included an SSN field in the employer’s database, and the HR department bought the software without questioning the design and intent. Because HR relies on such software to process you, HR doesn’t know what to do if you decline to provide data the software “requires.” Go figure. Suppose the software included a credit card field instead — that’s unique to you, too, right? But no one would expect you to provide it, because the employer doesn’t need it.

I feel your pain. Some employers will boot you out of the hiring process if you don’t give them your SSN (and your salary history) — just like a phone or cable company will refuse to sell you service without it. I wish someone would file a lawsuit.

When you’re stuck, blocked by a faceless job application form that asks inappropriate questions, there’s just one thing left to do: Go mano a mano. Yes, I’d call the employer — on the phone — and explain that you’d like to apply, but that you will provide your SSN only if you are hired. “So, how do we proceed with my application?”

Of course, HR might have a problem dealing with a human applicant, and it may have a policy against talking to applicants on the phone. Hey — where did you get HR’s private phone number, anyway…?

Do you hand over your SSN when applying for jobs? Is there an HR executive out there with the guts to stop asking for job applicants’ SSNs until after HR has decided to make an offer?

Question

The New York Times just did a story about a group of people suing LinkedIn for selling possibly invalid references to employers. Now LinkedIn has gone too far. This is causing employers to reject job applicants, and the applicants didn’t even provide the references! What do you think of this career sucker-punch?

Nick’s Reply

Here’s the bottom line: There is zero integrity in LinkedIn’s “Trusted References” sales pitch. While LinkedIn sells employers a reference checking service, it defends against the lawsuit by saying it’s not really selling a reference checking service — it’s just selling a list of names.

And LinkedIn thereby throws its own integrity into the toilet. I don’t see how any employer could even contemplate using such a “service.” It really is a sucker-punch — LinkedIn connects an employer with wrong “references” and you can’t even defend yourself.

I’ve got over 500 LinkedIn connections — most of whom I’ve never met. Some may have crossed my path at a company with thousands of employees. How irresponsible is it of LinkedIn to sell those overlaps as my
“trusted references?”

What are references?

What if I’m a food critic and I write a newspaper column that tells you a restaurant is no good? You buy the paper and avoid the restaurant. Can the restaurant sue me for loss of business? Even though money changed hands for “data,” do you really think a restaurant critic could go to jail?

I think the New York Times did a poor job covering this story, because it confuses several issues and fails to clearly point to the real problem.

Before we get into that, let’s remember that references make commerce possible. They are an important part of business. People’s opinions and judgments about us — and about products, services, brands and companies — are the coin of the realm in any economy. When smart employers hire and when good headhunters recruit, we check relevant opinions and judgments first, to make sure we know who (and what) we’re dealing with. That’s why your reputation — and any company’s reputation — is so important.

It makes no sense to suggest that checking references before hiring someone is inappropriate, or that rejecting someone for a job because of poor references is wrong. It’s due diligence. The Times seems to confuse seeking and sharing opinions with privacy. I think the lawsuit does, too.

But that’s where the controversies start. The Times doesn’t address certain questions, and I’m not going to, either, because this isn’t an analysis of references. Nonetheless, I’ll bait your confusion by posting some of the questions I think need to be answered:

What is a reference?

Who owns references?

How far can an employer go when checking references?

Can you buy a reference?

What does an employer pay for when using LinkedIn to check references?

For that matter, what do you pay for when using LinkedIn to make contacts or to get a job?

Are people free to ask about you and talk about you if they want?

What if someone decides not to do business with you based on what they learn from others?

America’s employment system has become such a jumble of promises, marketing, expectations, data and databases that everyone seems incredibly confused about what’s right, wrong, possible or legal.

Disclaimer

I’m not a lawyer, so this is not a legal opinion or legal advice. I’m a headhunter and my comments are based on (I hope) my business sense. What others say about your professional reputation matters a lot, and it does — and should — influence whether someone wants to hire you. But, what if a fencepost is checking your references?

Reference checking requires integrity

Headhunters — like homeowners looking to hire plumbers — check opinions and judgments all the time. We’ll make discreet inquiries to find out who you are, how good you are at your work, and what you’re like to work with. If we hear something out of the ordinary — positive or negative — we must have the good sense to double- and triple-check the information before we risk our own reputations by referring you to our clients. Like good restaurant critics, we realize that opinions we gather will have consequences.

Trust and integrity are the hallmarks of our business — which is why I say about 95% of headhunters aren’t worth spit. Too many are in the business for a quick buck, and their own judgment stinks (to say nothing of their skills). It’s up to you — the consumer — to use your head before you rely on a headhunter, whether you’re a job seeker or an employer.

Likewise, it’s up to employers to judge what LinkedIn is selling them when it delivers lists of references. And it’s up to employers to ensure that their own in-house recruiters know how to select, check and evaluate references properly. In my opinion, 95% of in-house recruiters can’t be trusted with the task, and no one is the wiser. Worse, many employers outsource reference checking and have no idea whether the results are valid or reliable.

My point is, you have no idea where your references will come from or who is checking them — any more than a restaurant does. So be careful.

What did LinkedIn do?

According to the lawsuit in the U.S. District Court of the Northern District of California:

“LinkedIn has created a marketplace in consumer employment information, where it sells employment information, that may or may not be accurate, and that it has obtained in part from unwitting members, and without complying with the FCRA [Fair Credit Reporting Act].”

The problem, plaintiffs say, is that:

“any potential employer can anonymously dig into the employment history of any LinkedIn member, and make hiring and firing decisions based upon the information they gather, without the knowledge of the member, and without any safeguards in place as to the accuracy of the information that the potential employer has obtained.”

In other words, plaintiffs claim LinkedIn is selling information that leads employers to inappropriately rejecting people for jobs. They also suggest that there may be some violation of privacy. I asked employment lawyer Mark P. Carey about the privacy issue. He says:

“Everyone who maintains a LinkedIn account should expect that their information is public.That’s why we have these personal/professional marketing pieces. There is no privacy issue as far as I can see, especially if you signed the user agreement before gaining access to host your own page.”

But I do think LinkedIn has a problem. First, LinkedIn takes money for what it advertises as “Trusted References for Job Candidates.” In so many words, LinkedIn suggests the references an employer pays to access about you are accurate — “Trusted.” That’s where I think LinkedIn crosses the line, whether legally or with regard to its own integrity. LinkedIn cannot possibly know whether those references are trustworthy. So how can it pitch them with impunity to employers — or defend them to job seekers?

When people are rejected for jobs because of questionable references, we’ve all got a problem. LinkedIn especially.

“A reference search locates people in your network who can provide reliable feedback about a job candidate or business prospect.”

That is, LinkedIn represents that an employer can rely on the references to justify hiring you or rejecting you. In fact, it uses those words to lure employers into buying those lists.

However, LinkedIn spokesman Joseph Roualdes tries to alter LinkedIn’s own representations when he tells the Times, “A [paid] reference search… simply lets a searcher locate people in their network who have worked at the same company during the same time period as a member they would like to learn more about.”

Suddenly, LinkedIn isn’t selling anymore. It’s covering its ass. The truth is on the web site: LinkedIn promises that the references employers are buying are “Trusted” and “reliable.”

References or just a list of names?

Here’s where I think the going gets dicey for the plaintiffs. Regardless of what LinkedIn sells and promotes — references — LinkedIn does not seem to really deliver references. It apparently delivers only a list of names. It’s up to the employer to talk to those people and ask them for references.

It seems to me that if the plaintiffs were rejected by employers due to bad references, the plaintiffs should be suing the references themselves for defamation — or the employers.

Lawyer Carey fleshes out the defamation issue for us:

“The real underlying issue here is whether and to what extent an act of defamation occurred… There is no legal claim there for anything, not even defamation. The article and the lawsuit dance across the fringe of privacy and defamation, without any substance. Only when a search adds content that provides a qualification uniquely driven at the particular candidate, then someone crosses the legal line of what is neutral and what is defamatory.”

But it doesn’t seem LinkedIn is “adding content.” That is, it doesn’t deliver the text of a reference, so there’s no defamatory statement.

Perhaps the employers who paid for those names have an action they can bring if the names yield inaccurate references when LinkedIn promises otherwise — but I don’t see how a job seeker could sue LinkedIn successfully because it sold names. That seems to be covered in the company’s terms and conditions.

The Times compares this suit to one against Spokeo, an online data broker which “agreed to pay $800,000 to settle accusations” that it marketed reports to recruiters and background screeners without providing consumers with protections afforded by the law.”

But LinkedIn doesn’t seem to sell reference reports about anyone. Again, I don’t see how LinkedIn can be liable for a bad reference. The data that employers rely on to make decisions did not come from LinkedIn; only names came from LinkedIn.

LinkedIn’s Customer: Fencepost, Inc.

The larger problem is that mindless employers believe ridiculous advertisements by LinkedIn that claim a list of names are “Trusted References… who can provide reliable feedback about a job candidate.”

(Remember, we’re talking about the same “professional networking” company that charges employers for lists of the best job candidates — while it sells high rankings on those lists to job applicants! We’re talking about the same employers that know this yet still pay LinkedIn to find job candidates! See LinkedIn Payola: Selling out employers and job hunters.)

Says the Times: “Sophisticated recruiters would not waste their time contacting people who clearly had no connection of significance to a job candidate.”

But they do, and if the New York Times is going to skate over this key fact, then it’s drawing the wrong conclusions, because most HR recruiters are fenceposts. Just ask any job seeker that deals with them. (See Why do recruiters suck so bad?)

Those same recruiters stupidly waste their time interviewing candidates simply because LinkedIn represents that the “profiles” it sells are “accurate.” Is it any surprise that recruiters are suckered into making hiring decisions based on “references” that may not be accurate?

A law professor cited in the article concludes, “A company can now decide which people associated with you can be curators of your reputation in situations that matter.”

But companies have always done that. The trouble is, now there’s no need to verify that a reference is legit — that is, valid or reliable. Because LinkedIn ensures us that it is.

What’s the real problem?

LinkedIn does not sell reference reports or reference information, so I don’t think anyone can hold it liable when employers reject applicants based on comments made by a list of people LinkedIn sells.

I think the wrong plaintiffs are suing. Employers should be suing LinkedIn for its failure to take reasonable measures to ensure that the lists of references it sells are in fact “Trusted References” and that they “can provide reliable feedback about a job candidate.”

Just how stupid are recruiters who “trust” LinkedIn references? The Times reporter says the plaintiff’s lawyer showed her that recruiters have no idea what they’re buying — or whether they’re calling real references at all. The lawyer ran a “LinkedIn reference search” on the reporter:

“The search produced a list of 43 people in his network who currently work or have done work for this newspaper — including a former I.T. consultant, a freelance contributor and two former interns. I had met only four people on that reference list, and none of them had direct experience working with me.”

Just imagine: A recruiter uses LinkedIn to search his network for people who are your “Trusted References” — but the recruiter has no idea whether any of them had any direct experience working with you.

You get rejected, because someone who never worked with you provided a questionable reference. (As I pointed out, I don’t know most of my connections, thanks to LinkedIn’s marketing mission to link everyone. What if a personnel jockey gets hold of an overlapping contact and trusts it as a reference about me — and I get screwed?)

The underlying question — and concern — is, how skilled is the reference checker, and is the check done properly and with integrity?

The recruiter’s purchase of a list from LinkedIn becomes the faux justification for one potentially bad decision after another — and one unemployed LinkedIn user after another.

Have you been sucker-punched by wrong references?

LinkedIn’s “Trusted References” service is a cheap sucker-punch straight to your career and reputation. Now any personnel jockey can “check a reference” on LinkedIn without having the faintest idea what she’s doing — and you get screwed out of a job. For that reason alone, I hope LinkedIn gets its ass sued sixteen ways from Sunday. I’m not sure this suit will succeed, because I think it focuses on the wrong issues. But the legal issues are for the lawyers and the courts.

The business issue is, LinkedIn is talking out of two sides of its mouth. It markets a references service to employers, while telling the judge it’s really no such thing. And employers buy both stories.

Perhaps more to the point, since it’s consumers suing LinkedIn, those consumers need to admit that they bought into a marketing machine that uses their personal information to make money at their expense — and they agreed to the terms. When someone walks straight into a sucker-punch, it’s hard to sympathize with them.

Lots of questions remain. Whatever happens with this suit — or others that I hope it spawns — the thing that’s clear is LinkedIn’s marketing strategy: There’s a sucker born every minute, and we’re going to sell them all anything they’re willing to swallow.

Has LinkedIn’s reference service interfered with your job search, or cost you a job? How does LinkedIn’s credibility rate with you?

Pssst! Want a job? You might have to relocate to… Anonymous Proxy, Ohio (???)… Read on to learn how!

In The Bogus-ness of Indeed.com we discussed phony success metrics published by “the world’s #1 job site.” The point of that column is that Indeed implies it fills lots of jobs and finds jobs for lots of people (“140 million”) — yet never actually claims anything of the sort.

Bob, an Ask The Headhunter reader who uses no surname, just sent me something interesting — more bogus-ness from Indeed that’s worth a laugh. You can play along, too!

I call this game…

Are you as dumb as HR?

Bob suggests we visit I got a job! at Indeed.com. (Please open a new browser so you can play along without closing this page.)

Wow! Look at all the millions of success stories people have posted! Now click the button at the upper right of that page, labeled “Add your story.” Indeed gives you a form:

Cool form, eh? Well, to play this game, you don’t have to do any more work than the good folks at Indeed do to find you a job. Don’t enter any information. Leave it all blank!

Just click the button labeled “Share your story.”

BAM! You’re done! Indeed will congratulate you on your new fake job and add one to its counter.

Did you win?

You just helped Indeed fake out the next person that comes along!

Bob says, “What this means is that robots can actually click this and increase the job count automatically.”

Boy, those robots must be awfully tired! Indeed is helping people get jobs… where? Why, in Anonymous Proxy! (Hey, is that in Ohio?)

One of Indeed’s big marketing lines is about “How the world works.” Now you know how Indeed works. It doesn’t claim it filled all those jobs. You claimed you got all those jobs!

But wait a minute… You’re not as dumb as the HR departments that dump billions of dollars into job boards like Indeed every day! Yay!

But if you keep playing this game, you still lose — because you’ll keep wondering why you can’t find a job online!

Is there another way? Of course there is — don’t play games! There’s no faking it. There’s no automated shortcut to the job you really want. Check Ask The Headhunter In A Nutshell: The short course for 4 tips that include no shortcuts — or dumb online forms.

My wife, a veteran in her field, began a search for a better job and company. In the past, she used the broken and traditional job hunting methods. After showing her the Ask The Headhunter website and purchasing the companion books — and with a little coaching from me — she landed two job interviews with hiring managers within three weeks.

Suddenly, a personnel jockey injected himself into the ongoing discussions with the hiring manager. The recruiter insisted that my wife submit herself to a one-way, online digital video taping, answer a series of pre-selected “screening questions,” and upload it to who knows where for “further review and screening” by who knows whom.

She found the request creepy, impersonal, presumptuous, Orwellian, exploitative, voyeuristic, unprofessional, and perhaps even unethical. (I’ve attached HR’s e-mail.) She declined, instantly prompting an automated “Do Not Reply” rejection e-mail. She was not worthy because she wouldn’t subject herself to a dehumanizing “HireVue Digital Video Interview.”

This new wrinkle in HR practices seems like the most unsettling and counterproductive yet. It not only removes access to the hiring manager, but also live, human interaction. It sounds like “HR pornography,” where perverted personnel jockeys huddle around a monitor to gawk at videos of “virtual job candidates,” picking apart perceived blunders while they screen you out.

Would you please share your comments and advice on this new and bizarre interviewing phenomenon?

Nick’s Reply

This HR department cheapens itself, the employer, and everyone it subjects to automated interviews. “Talk to the camera by yourself” is not an interview. It’s stupid. Your wife is right to say no, and she’s smart to move on to a better employer.

A recent survey of 600 HR professionals by McQuaig Institute, which develops talent assessment tools, found that 65% of respondents said their company’s hiring managers are not very good interviewers. Meanwhile, HR says its job is to train managers to interview. Is it any wonder HR cuts itself and hiring managers out of interviews and farms the task out to a video company?

A 2013 ADP survey found that, “Consistently across the globe, employers have a significantly more positive impression of how they manage their workforce versus what their employees experience in the workplace.” ADP concludes that “as a whole, HR does not have a handle on the asset it is hired to manage.”

In short, HR is doing a lousy job at interviewing, and HR seems to think it knows what it’s doing — while employees disagree. HR has cornered the market on stupid.

If your wife has already decided not to “make a porn with HR,” I suggest she call the hiring manager and say something like this:

“What’s up with your HR department? I’m glad I spent time talking with you about the job and how I could help your company. But I don’t make videos. I’d be glad to come in for an interview with you. If we decide there’s a match, I’ll fill out a form for HR, but I don’t talk to imaginary interviewers on camera. I find that insulting. I leave the rest up to you.”

Of course, use whatever expressions you are comfortable with. But let the manager know you’re interested in further discussion with him, but not in solo videos for HR.

An alternative is to offer to do a Skype interview with the manager. HR may not realize that Skype is basically free, while video interview services can be pricey.

Managers who relinquish control of job interviews to HR likely also let their mothers vet their dates. The culprit here is HR, but the real problem is the hiring manager. Will he stand up and do what good managers do — make his own decisions? (For more about how HR’s missteps can cost you a job, see 7 Mistakes Internal Recruiters Make and The Recruiting Paradox.)

I reviewed the e-mail instructions your wife received — all boilerplate. It’s pitiful and sophomoric:

“One of our Recruiters will review your information and if there is a good match, you’ll be contacted either via e-mail or phone to schedule additional time to speak live.”

But the hiring manager has already decided to spend “additional time speaking live” with your wife. So what’s up with this? How is a “Recruiter” (capital R) going to judge whether there’s a good match better than the manager who has already been interviewing her? Stupid.

“This is a real interview! Be sure to treat this interview as you would an in-person interview.”

Bull dinky, not it’s not! It’s a fake interview with no interviewer.

An alternative is to offer to meet with the hiring manager again, rather than do the video. There is no need to say no if you offer a sound alternative.

If anyone fears saying no means “losing an opportunity,” the far bigger risk is having your video rejected by HR — and then having it float around the company forever — if not in some video-interview vendor’s database. (How do you know it won’t be shared with other employers?)

“Feel comfortable to be yourself. We want to see your personality.”

What they mean is, we don’t want you to see the personalities of our personnel jockeys because, face it, they’re a bunch of data diddlers that we don’t want talking to anyone. (I wonder what they’d say if you asked for a video of HR answering your questions? For more stupid HR tricks, see WTF! Inflatable Interviewer Dolls?)

If I were your wife, I’d want to talk with the manager one more time, to find out what he thinks about all this. If he tells her he has no choice, my reply would be, “I’m amazed. I left our discussions very impressed, but I’m going to be blunt with you. I’d never take a job in a company where managers don’t manage the hiring process. It says a lot about the operating philosophy at your company. I wish you the best.”

Is your wife taking a risk by talking to the manager like this? I think there is little, if anything, to lose when you are forced to the back of the line by the HR department and the manager concedes. A professional community that does not call out questionable behavior is not worth living or working in.

To see the punch line in all this, you have to visit HireVue.com, the company that handles video interviews for this employer. Scroll to the bottom of the homepage, where HireVue offers a “success story” from a leading customer — Rodney Moses, VP of Global Recruitment at Hilton Hotels. But Rodney doesn’t tell his story in a video; it’s a slide show hosted not on HireVue, but on SlideShare.net. Video interviews are good enough for you, but not for HireVue’s best customers. HireVue and HR need to eat their own dog food before feeding it to job seekers.

More important, HireVue reveals the real problem employers face, in the introductory video at the top of its homepage.

HIREVUE AUDIO: “In a sea of candidates that all look the same, how do you find the ones that stand out? Since 2005 the number of applicants for any given job has increased four-fold, making it impossible to properly screen and assess each individual…”

No kidding! And what do you suppose caused that increase?

HireVue’s business model is predicated on employers blindly soliciting staggering numbers of applicants — far too many — via indiscriminate digital advertising. The results overpower any employer’s HR resources, so HR needs a video screening process to deal with a job posting process gone haywire. The real solution is to turn off the firehose and eliminate the flood of inappropriate applicants.

Hold the presses! I’m going to show you how HR created “the talent shortage.”

I recently did a Talk to Nick consultation that illustrates why employers aren’t filling important jobs — while they complain there’s a talent shortage. The real talent shortage is in corporate management, where hiring is treated as an expense rather than an investment. Here’s what crummy job offers cost employers.

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago!

Background

“Mark” (not his real name) is a successful engineer who asked me for help in 2012 — to land a better-paying job elsewhere. He succeeded, and since then his engineering skills have grown and he has developed expertise in operations and quality assurance. This talented R&D engineer can now convert technically challenging concepts into products ready for production. His skills and abilities are far more valuable today than they’ve ever been. He contacted me again a few months ago when a manager at his old company encouraged him to apply for an R&D engineering position — in other words, to return.

After an hour’s consultation with me, Mark had a series of interviews, including a meeting with the manager who knew him so well the first time around. Here’s what Mark reported happened next.

Mark’s Story

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago! I declined to state my current salary in the screening interview, and instead explained the salary range I’d expect for an engineer with my experience. The personnel jockey replied that, “You know you will have to provide this at some point to move forward.”

I suspect the HR people pegged me based on my last known salary. If I had stayed with this company for five more years, I would be making more than the offer — a figure around my current salary.

I negotiated with the hiring manager, but HR handled the offer. There was some motion on their side, but only in the form of a one-time check that had large strings attached. The deal fell through. Companies succeed in spite of themselves!

The reasons why they could not improve the offer were as bizarre as some of the excuses I used to hear on my personnel reviews about why I could not be rated higher. In my conversations with the hiring manager, he stated that they recently lost a good employee in much the same way they lost me. I just chuckled. Thanks again for your assistance.

Nick’s Reply

The McQuaig Institute (a developer of talent assessment tools) recently polled over 600 HR professionals. The #1 reason they lose job candidates — reported by 48% of U.S. companies — is because the offers they make are too low.

HR knows where the talent shortage comes from: Lousy job offers.

Peter Cappelli, a human resources and labor researcher at the Wharton School, confirms that “employers can’t get candidates to accept jobs at the wages offered.”

Employers know exactly what the problem is, but they play dumb.

Cappelli points out, “That’s an affordability problem, not a skill shortage. A real shortage means not being able to find appropriate candidates at market-clearing wages. We wouldn’t say there is a shortage of diamonds when they are incredibly expensive; we can buy all we want at the prevailing prices.”

Employers today refuse to pay market salaries and wages, then blame the labor force. (See How to decide how much you want.) That’s how HR — which took control of your job offer — lost you, along with other employees, and created the talent shortage at this company. This is how HR turns companies into losers.

It can be hard to swallow the reality that a company just isn’t going to make a prudent decision when it makes a ridiculously low job offer. I can’t tell you how many times I’ve advised clients to raise offers — after I’ve shown them what it’s going to cost to leave work undone. Crummy job offers also cost employers their reputation — in their own professional community when word gets out that their offers are too low.

Many just don’t get it. Employers incorrectly view hiring as an expense rather than an investment with an ROI. The great irony is, the actual extra dollars spent on higher offers are almost irrelevant when compared to the value the new employee will create. The more subtle lesson that some companies — but not most — learn is that enhancing an offer can make a new hire happy, more loyal, and more productive. Money doesn’t buy love, but it can buy better work.

However, Cappelli points out that corporate accounting systems do not track the cost of leaving a job vacant, making it appear that the “cost savings” of leaving the job empty translate into “profit.” (Yes, I’m still laughing my A off at that one. Call it revenge against the bean counters!) A crummy job offer costs an employer — and our economy — quite a lot.

Employers are shooting themselves in the foot when they make silly job offers. An engineer plus five years’ more experience, plus expertise translating designs into buildable, quality products, plus the maturity to work across corporate departments is worth more than the same engineer five years ago.

Except to a cheap employer with a serious talent shortage in the executive suite.

Good for you for rejecting a lousy offer. I realize not everyone can afford to do that. (See Turn down that job offer.) I think such jobs get filled because employers wear applicants down and convince them that “this is the way it is, and you should accept it.”

In Pursue Companies, Not Jobs, I suggest that you (or anyone) should pick a good company, take the best job you can get there, and navigate the company once on board to get to the jobs you really want in time. It’s all about the quality of the company and the people. Salary is such a small component of a company’s business, yet HR is so focused on it that enormously bad business decisions are made over a few bucks. (Meanwhile, HR blows billions on job boards, applicant tacking systems, and other automated “tools” to help it make more low-ball offers to save money… gimme a break!)

Your old boss confessed to you what crummy salaries and job offers do: They make talent disappear. So you don’t need a news flash — you already know.

Have employers created the talent shortage? Are they paying for crummy job offers in ways they don’t realize? Have you been smacked with a ridiculous offer? What implications do you think this has for our economy?